General Principles Flashcards
The IRR is also know as ____.
Dollar-weighted return
What does it mean when NPV is negative?
The IRR is less than the client’s required rate of return. The client should probably not buy the investment.
For what applications is a FAFSA required?
- Federal and state college financial aid
- Private colleges
- PLUS loans
What is the fee to submit a FAFSA?
$0
What is the earliest date the FAFSA can be filed?
October 1st of the year before the school year starts
Assets not countable toward EFC on the FAFSA
- Retirement accounts
- Small businesses owned and controlled by the family
- Life insurance cash value
Early withdrawals from qualified plans and IRAs for education expenses
Qualified plans: 10% penalty still applies
IRAs: 10% penalty does not apply if used for qualified post-secondary education expenses:
Tuition, books, fees, room and board
Up to ____% of the assets owned by the student will be considered for the EFC
20%
Up to ____% of a parents unprotected assets will be considered for the EFC
5.64%
None of the student dependent’s income is counted toward the EFC if the income is less than ________.
$6,000
The EFC _________ when the number of students in the family increases.
Decreases
Deductibility of 529 / Coverdell contributions
Contributions are not deductible for federal tax purposes.
Certain states provide state income level deductions for 529 plans.
When is room and board NOT considered a qualified education expense?
EE bonds
AOTC
more?
AOTC
American Opportunity Tax Credit
- Part can be a refundable tax credit
Taxability of scholarships / fellowships
Tax-free: tuition, fees, books, course-related costs
Taxable: room and board, travel
